American Express vs Bank of America Which Outperforms?

American Express and Bank of America are two financial giants in the United States with well-established reputations in the banking and financial services sector. As publicly traded companies, their stocks are popular choices for investors looking to diversify their portfolios. American Express is known for its focus on high-end credit card services and rewards programs, while Bank of America is one of the largest banking institutions in the country. Both companies have seen fluctuations in their stock prices in recent years, making them interesting options for investors to consider.

American Express or Bank of America?

When comparing American Express and Bank of America, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between American Express and Bank of America.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. American Express has a dividend yield of 0.89%, while Bank of America has a dividend yield of 2.19%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. American Express reports a 5-year dividend growth of 10.01% year and a payout ratio of 19.64%. On the other hand, Bank of America reports a 5-year dividend growth of 11.24% year and a payout ratio of 40.07%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with American Express P/E ratio at 21.63 and Bank of America's P/E ratio at 15.12. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. American Express P/B ratio is 7.20 while Bank of America's P/B ratio is 1.20.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, American Express has seen a 5-year revenue growth of 0.74%, while Bank of America's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Express's ROE at 34.09% and Bank of America's ROE at 8.03%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $301.25 for American Express and $45.38 for Bank of America. Over the past year, American Express's prices ranged from $177.50 to $307.82, with a yearly change of 73.42%. Bank of America's prices fluctuated between $31.27 and $48.08, with a yearly change of 53.76%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.